China’s Economy in Trouble?

Central Bank of China made announcements last week that it would be reducing the reserve requirement ratio for commercial lenders to maintain the liquidity for China’s financial system. This move is seen by the global markets as a reaction to the first quarter GDP results for China that showed a slower growth rate of 8.1% annualized verses the expected 8.4% that analysts were expecting. Zhang Zhiwei, Chief China economist at Nomura Holdings Inc. was quoted by Bloomberg as saying that the Central Bank had “sent a message that further loosening measures will be rolled out”.

Actually, the results from the Chinese economy and all of these steps that their Central Bank is taking are quite expected from a free market economy which the Chinese government has been moved towards in the last decade. The US and the world economies have demanded it and now we should expect natural ups and downs…we cannot have a everything.